J. David Cox, National President of the American Federation of Government Empoloyees, on August 23, 2012 in Washington, D.C. (Colin Kelly / Staff) (Colin Kelly/Gannett Government Media Co.)

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The Housing and Urban Development Department is canceling furlough days that had been scheduled for Aug. 16 and Aug. 30, according to a grievance settlement Friday between the agency and the American Federation of Government Employees. The deal means that HUD workers will lose a total of five days in fiscal 2013 to unpaid furloughs, instead of the seven originally envisioned by management.

“Eventually, agencies across government are coming around to the reality that furloughs are costly and counterproductive in terms of dollars, production, and morale,” AFGE President J. David Cox said in a Friday statement announcing the settlement.

The Defense Department and the IRS also agreed this week to reduce or postpone previously scheduled furlough days. A HUD spokesman could not immediately be reached for comment Friday afternoon.

Under Obama administration policy, agencies resorting to furloughs because of sequester-related budget cuts have to bargain over the exact implementation terms with employee unions. At HUD, the original March “memorandum of understanding” with AFGE setting the total of seven furlough days was signed barely a month before the agency announced office closings and a major reorganization that will affect about 900 employees and cost millions of dollars for office retrofitting, new furniture and buyouts, according to Eddie Eitches, president of the AFGE council that represents about 6,500 of 9,000 HUD employees.

Had management postponed such steps until fiscal 2014, it could have saved enough money to cut the number of furlough days to five, Eitches said in an email to agency workers earlier this week. AFGE’s grievance had been scheduled to go before an arbitrator next week, but the union agreed to a postponement in anticipation of an agreement, Eitches said. HUD officials are looking for other ways to save almost $8 million, he said.